StatsCan shines a light on wealth in Canada

In this Oct. 15, 2011 file photo, a protester with the “Occupy Seattle” movement wears a Guy Fawkes mask and takes a photo with a mobile phone as he demonstrates in downtown Seattle. (AP Photo/Ted S. Warren, File)

Statistics Canada released data recently on the incomes of the top 1 per cent of tax filers, and compared these to the incomes of the remaining 99 per cent. Not surprisingly, this small segment of the population receives a disproportionate share of the pie — about one-tenth of all individual income, with a median income of $283,400, about 10 times the median of the bottom 99 per cent.

StatsCan has further provided comparable data going back to 1982 — not only by province and for the five largest cities, but also for men and women separately. StatsCan also used its CANSIM data dissemination tool (now free of charge) to provide a tremendous range of much more detailed breakdowns — enough to keep data junkies busy for weeks.

For example, the threshold to be in the top 0.1 per cent in terms of after-tax income, at $2.2-million, is almost 14 times as high as the threshold for the top 1 per cent. Virtually all the news coverage so far has discussed only the numbers in the StatsCan text for the data release, which referred only to before-tax income.

What you may not have noticed is that this is the first time StatsCan has ever produced such data as part of its standard suite of statistics. One of the challenges for a national statistical agency is to stay relevant on the issues of the day. The Occupy movement has been news for more than a year, and we even saw the global business elite in Davos recently putting income inequality at the top of their agenda. So these new numbers are most welcome.

Interest among official statisticians in the issue of income inequality reached a peak recently when former French prime minister Nicholas Sarkozy appointed a blue ribbon commission, featuring a handful of Nobel laureates, to examine serious gaps in national statistics.

The three major areas addressed by the Stiglitz/Sen/Fitoussi commission report in 2009 were the environment, well-being, and incomes — particularly income inequality. The commission’s belief is that most people cannot relate personally to GDP statistics, not least because economic growth has not been spread evenly. Middle income individuals have experienced stagnant incomes while GDP has grown over past decades. The commission’s advice, therefore, was for official statistics to provide more detail on the distribution of income for individuals and families.

Statistics Canada has a long and exemplary history of producing data on incomes and income inequality. For example, in parallel with leading work by Mollie Orshansky in the U.S., Jenny Podoluk in a 1967 census monograph introduced the low income lines that are widely used as poverty indicators. Data on the numbers of individuals and types of families with low incomes have been published annually and in detail ever since. The same household surveys used for these data are also used to provide data on those with middle and upper-middle incomes.

But these surveys were never sufficiently reliable to provide data on the top 1 per cent, so such data were not published — not until this past Monday.

Columnist Terence Corcoran wrote a blistering and unwarranted attack on StatsCan, accusing it of pandering to the Occupy movement by publishing data on the rich — as if those were the only income distribution numbers published.

If anything, the opposite is true: StatsCan deserves to be commended for balancing its long-standing statistical series on low- and middle-incomes with these newly available data on high incomes.

Michael Wolfson is an adviser with EvidenceNetwork.ca, and Canada Research Chair in population health modelling/populomics at the University of Ottawa. He is a former assistant chief statistician at Statistics Canada, and has a PhD in economics from Cambridge.

The views, opinions and positions expressed by all iPolitics columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of iPolitics.

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Michael Wolfson is an expert advisor with EvidenceNetwork.ca and holds a Canada Research Chair in population health modeling/populomics at the University of Ottawa. He is a former assistant chief statistician at Statistics Canada, and has a PhD in economics from Cambridge.